Tory backer cancels £250,000 gift

A wealthy Tory donor is to cancel a pledge of £250,000 amid growing unrest on the right of the party over David Cameron's campaign to move to the centre ground.

The protest by the unnamed industrialist was revealed to The Observer last night by one of a number of party backers with whom he discussed his move. The colleague said it reflected 'concern and unhappiness' over Cameron's policy shifts in a number of areas, including a downgrading of the party's commitment to reduce taxes and the abandonment of long-held Tory positions, including support of business.

Cameron, who is on paternity leave after the birth of his son Arthur Elwen, appears to be enjoying a honeymoon period with the public and the source said most critics felt they should publicly back him. But he added: 'We're in a dilemma. We're Conservatives and we want a Conservative to win. But he is drifting a long way away.'

This week Robin Harris, Margaret Thatcher's former speechwriter who first hired Cameron to work for the Tories, will make public such concerns with a warning that the new direction is being treated with 'thinly disguised contempt' by Tory opinion-formers. In an article in Prospect magazine, he says: 'Above all, he should be having sleepless nights about what he is doing to bedrock Conservative support in the country.'

However, a number of MPs told The Observer that opposition to Cameron's changes was coming from a small minority - and that the new leader remained determined to restore the Conservatives to an election-winning position.